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Alternative Fuel Tax Parity Act to Fix LNG Tax Inequity Introduced in House

On Thursday, Rep. Todd Young (R-IN), John Larson (D-CT), Mac Thornberry (R-TX) and Ron Kind (D-WI) introduced the Alternative Fuel Tax Parity Act (H.R. 1665) that corrects the LNG tax disparity. Currently, liquefied natural gas (LNG) is taxed at a rate 70 percent higher than diesel fuel on an energy content basis, working against adoption of natural gas vehicles in the heavy truck market.  Resetting the tax rate so that it is based on energy content rather than volume would remove an artificial barrier from the market.

“As we see more and more alternative fuel service stations popping up around my district and the country, it’s important that we ensure inequitable tax rates don’t discourage consumers from adopting alternative fuel vehicles,” said Young. “This bill is an easy way to ensure a level playing field for this burgeoning sector of our economy.”

The Alternative Fuel Tax Parity Act adjusts the excise tax rate for LNG from 24.3 cents per gallon to 14.1 cents per gallon, effectively compensating for the difference in the energy content between the two fuels.

“We are encouraged that critical issues such as fixing the LNG/diesel tax disparity are receiving attention in the new Congress,” said NVAmerica President Matthew Godlewski.  “It is a solid signal that we’re getting close to resolving the federal roadblocks that are standing in the way of further accelerating natural gas use in the trucking sector.”

For more information, contact Paul Kerkhoven at 202.824.7363 or pkerkhoven@www.ngvamerica.org, or visit the NGVAmerica website here.